Side Projects

Back when we started USV in 2003/2004, we used to see a lot of side projects that had taken off and were turning into companies. We funded at least one such side project, Delicious, which ended up getting sold to Yahoo! a few years later. But I remember that we would see one or two of these sorts of things every month. It was a meaningful part of the internet innovation ecosystem at that time.

Fast forward to today and we don’t see many side projects that have turned into or are turning into companies anymore. I suspect that some of that is the effort to build and launch something that can reach broad adoption is harder. You have to build for desktop web, mobile web, iOS, and Android if you want to get your app in front of everyone. Back in 2003/2004, you just had to build for the desktop web.

But I also think that it is so much easier to quit your job and get some seed funding that less and less people are building apps as side projects today. Why work 60 hours a week at Facebook and then another 40 hours a week on your side project when you can quit your job at Facebook and land $250k of seed money on the day you leave?

I think the move away from side projects toward doing a startup day one is not all good. There was something great about the ability to experiment with an idea before committing to it and before sucking other people’s money into it. When it didn’t work, it didn’t work. No need to pivot to save face or get your investors whole. Just shut it down and tinker on another idea.

I am hopeful that crowdfunding services like our portfolio company Kickstarter and others offer people with good full time jobs the opportunity to be “entrepreneurs on the side”, to test their ideas with potential customers, to build prototypes, and to see if there is excitement about the idea before leaving their job and pursuing the idea on a full time basis.

My point is that experimentation is critical. We should have lots of it. Seed capital, venture capital, angel investments, angellist, YC, techstars, etc, etc are great and fund a ton of experimentation. But they do require a commitment of time (yours) and money (mine) that isn’t ideal in many cases. So I hope that the fact that we are seeing less and less side projects is a temporary thing and that the market will correct in some way to bring them back. I think they have an important role to play in the innovation economy.